LawDistill
Supreme Court of India

K. P. POULOSE vs STATE OF KERALA & ANR on 21 April, 1975

Cites 0 provisionsCites 0 judgmentsCited by 9
Official PDFBench Alwar Naicker Alagiriswami, Parbati Kumar Goswami, Prafullachandra Natwarlal Bhagwati
PETITIONER:
K. P. POULOSE
Vs.
RESPONDENT:
STATE OF KERALA & ANR.
DATE OF JUDGMENT21/04/1975
BENCH:
GOSWAMI, P.K.
BENCH:
GOSWAMI, P.K.
ALAGIRISWAMI, A.
BHAGWATI, P.N.
CITATION:
1975 AIR 1259 1975 SCR 214
1975 SCC (2) 236
CITATOR INFO :
D 1989 SC 606 (8)
ACT:
Arbitration Act, s. 30 (a)-Scope of.
HEADNOTE:
For the construction of three overhead reservoirs tenders
were invited. The appellant was the successful tenderer for
the work. The notification inviting tender,., gave a
description of the soils at the places of constructions.
Sometime later, however, the Research Institute of the State
Government recommended a different mode of foundation in
respect of one reservoir and the department accordingly gave
instruction to the appellant to adopt the process
recommended by the Research Institute. The appellant
executed the work in accordance with the recommendations of
the Research Institute and claimed a higher payment on the
ground that the work done by him was not included in the
original design because when he submitted his tender he

CIVIL APPELLATE JURISDICTION CIVIL APPEAL No. 1485 OF 1974 Appeal by special leave from the judgment and decree dated 29-1-73 of the Kerala High Court in A.S. No. 357 of 1972. S.V. Gupte, C. J. Balakrishnan and A. S. Nambiar, for the appellant. T. S. Krishnamurthy Iyer anti K. R. Nambiar, for the respondents. The Judgment of the Court was delivered by GOSWAMI, J.--This is an appeal by special leave against the judgment of the Kerala High Court setting aside the judgment of the Subordinate Judge, Ernakulam and restoring the award of the Arbitrator who had earlier refused the claim of the appellant. The appellant (briefly the contractor) was a successful tenderer for construction of three zonal R.C.C. Overhead Reservoirs, two in Matencherry and one in Cochin, in connection with the Ernakulam Mattencherry Water Supply Scheme. In the schedule annexed to the notification inviting tenders under the heading ’Site’, it was stated that "the soil at the site for Reservoir No. 1 and Reservoir No. 2 is loose clay and for Reservoir No. 3, sandy". The tenderer was to execute an agreement on a stamped paper before commencing work. It appears later on the Kerala Engineering Research Institute, Poochi. Soil Mechanics and Foundation Division (briefly the Research Institute) submitted a report (Ext. P. 10 dated September 14, 1965) that the sub-soil at the three places chosen as sites for the reservoirs upto 16 in showed that the top soil was sand, the middle layer clay, and the bottom layer, silty sand or sand. It was stated that the clay found at the three places was of a highly compressible nature and hence pile foundation was preferable and that as the top strata was sandy, jetting had to be resorted to for driving the piles through this strata. After receipt of the opinion of the Research Institute, respondent No. 2 (hereinafter to be described as the Department) gave instructions to the contractor to adopt the process of jetting for driving piles for the tank at Thoppumpady which is alone in dispute in this case. On October 7, 1965, the Chief Engineer after scrutinising the pile design of the contractor wrote to him, inter alia, as follows :

"The piles as per design submitted with raft

like cap may be adapoted for tank at

Thoppumpady where the length of pile suggested

by the research division is in the region of

30 ft................ Jetting has to be

resorted to in the top strata where sandy

layer is met with.... Your statement that

piles of more than 30 ft. length is very

difficult to be driven in Ernakulam is not

quite convincing to the Department.

Any how a decision will be taken on this only

after ascertaining the details regarding the

practical difficulties if any from agencies

actually engaged in such type of works in the

locality.

Meanwhile you may please execute the agreement

and start the work on the Reservoir at

Thoppumpady receiving further instructions

from Executive Engineer, Public Health,

Alwaye" (Ext. P. 1). On February 21, 1966, the contractor wrote to the Executive Engineer informing him that as per instructions of the Research Institute and 10 SC/75-15. site conditions he provided jetting arrangements for driving the piles although the process of jetting was not included in his tender. He enclosed the details of expenditure on that account and mentioned that for the pile casting he used extra reinforcement for additionally strengthening the head of piles due to the site, condition. He pointed out that this was not included in his original design. The sum and substance of the contractor’s grievance was that he assumed the site condition to be as represented in the schedule to the notification inviting tenders and submitted his original design on that basis and since, however, the site condition was found to be different and on the advice of the Research Institute jetting had to be resorted to involving extra expenditure he was entitled to claim additional amount for the work of jetting. The Department, however, refused the claim which led to the arbitration under; clause 34 of the tender notification. The Arbitrator was the Chief Engineer. It appears the award was based on examination of documents and after hearing arguments of the parties. The award with which we are concerned is a speaking one and gives the reasons for the decision against the contractor. Mr. Gupte, the learned counsel for the appellant submits that the Arbitrator was guilty of legal misconduct in conducting the proceedings. He submitted that two very material documents, Exts., P. 11 and P. 16, were absolutely ignored by the Arbitrator resulting in miscarriage of justice. On the other hand Mr. Krishnamurthy Iyer submitted that these documents were not even marked before the Arbitrator; they were marked only before the Subordinate Judge. According to him, therefore, there is no foundation for the grievance. We have been taken through all the relevant documents by the learned counsel for both sides and we are satisfied that Ext. P. 11 and Ext. P. 16 are material documents to arrive at a just and fair decision to resolve the controversy between the Department and the contractor. In the background of the controversy in this case even if the Department did not produce these documents before the Arbitrator it was incumbent upon him to get hold of all the relevant documents including Exts. P. 11 and P. 16 for the purpose of a just decision. Ext. P. 1 1 dated September 8, 1966, is a communication from the Superintending Engineer to the Chief Engineer with regard to the objections raised by Audit in connection with the construction of the reservoirs. The following extract will explain the position then taken by the Department:-

"The contention of the Accountant General that

jetting was resorted to by the contractor to

facilitate the driving of the piles is not

correct. Had it not been for jetting, it

would not have been possible for the piles to

reach the required depth of 30’, passing

through sandy strata and we would have been

constrained to stop with a smaller depth viz.,

upto the point of refusal for penetration of

the pile by hammering. It was, therefore, in

the interest

of the work that jetting was insisted upon by

the Department for pile driving. The

contractor had to resort to jetting under

instructions from the Department.

The Accountant General has stated that the

department is not bound to pay extra for

adopting the method of jetting for pile

driving. This does not appear correct since

the method of jetting was adopted in the

interest of the department in view of the

sandy stratum obtaining at the site as against

the indication given by the department that

the soil is clayey upto a depth of nearly 200

ft. No doubt, the contractor was asked to

ascertain the nature of the soil; but this

does not imply that he was to conduct

exploratory borings to confirm the

classification given by the department in the

tender within the short span of time available

for submitting tenders". Earlier also on July 25, 1966, as per Ext. P. 16 the Executive Engineer had written to the Chief Engineer wherefrom paragraph 4 is revealing

"Even though while inviting tenders for the

work there was a condition that the tenderer

should examine the soil condition it was not

expected, of them to do soil testing in detail

within the period available to them to tender

for the work. A clear indication regarding

the nature of the strata that is likely to be

met with was also furnished at the time of

inviting tenders. After complete ,oil

investigation the strata was found to be

different from that furnished by the

department and so in my opinion technical

specification has changed. In the

circumstances jetting clone by the contractor

can be considered as an extra item". We now come to the Award. Although the Arbitrator has held that "jetting, however, is not an authorised extra covered by the agreement", he has made the following significant observation which is inconsistent with his conclusion that the contractor has no right for extra payment for the jetting :

"The Chief Engineer has rejected the claims of

the ’contractor on grounds of non-inclusion of

this (jetting) in the agreement which was

executed subsequent to the direction issued by

the department to adopt jetting. The Chief

Engineer’s decision totally ignores the next

sentence in that letter ’Meanwhile you may

execute the agreement’. By this sentence the

issue of extra payment for jetting is left

open even after the execution of the

agreement". If the above is the conclusion of the Arbitrator, rejection of the claim on the ground that "jetting, however, is not an authorised extra covered by the agreement" cannot be anything but rationally inconsistent. The award, therefore, suffers from a manifest error apparent ex facie. Under section 30(a) of the Arbitration Act an award can be set aside when an Arbitrator has misconducted himself or the proceedings. Misconduct under section 30(a) has not a connotation of moral lapse. It comprises legal misconduct which is complete if the Arbitrator on the face of the award arrives at an inconsistent conclusion even on. his own finding or arrives at a decision by ignoring very material documents which throw abundant light on the controversy to help a just and fair decision. It is in this sense that the Arbitrator has misconducted the proceedings in this case. We have, therefore, no hesitation in setting aside such an award. In the result the judgment of the High Court is set aside and that of the Subordinate Judge is restored. The award of the Arbitrator thus stands quashed. The Arbitrator will complete the proceedings after considering all the relevant documents including Ext. P. 11 and Ext. P. 16 after giving opportunity to the parties. The appeal is allowed with costs. P.B.R. Appeal allowed.